As part of the nationwide effort to create uniform licensing processes, Louisiana recently passed legislation based on the NAIC Uniform Producer Model Act. This legislation was signed by Governor Mike Foster on May 25, 2001 and became effective January 1, 2002.
Key highlights of the new producer law:
- Eliminates any reference to agents, brokers and solicitors who are all now referred to as "Insurance Producers".
- Defines key terms used throughout the law. The terms sell, solicit and negotiate which determine when someone needs to obtain a producer license are now defined in the law.
- Allows for renewal dates to be changed to a licensee's birthdate
- Clearly sets forth exceptions as to when a person does not need to obtain a producer license.
- Creates a uniform application process for licensing both resident and non-resident producers.
- Allows for the use of today's technology to implement electronic applications, appointment of producers with the insurance companies they represent and receiving electronic payment of fees through the Internet.
- Deletes the provision that an applicant applying for an insurance license have a company appointment as part of the application submission.
- Clearly states when a producer is required to obtain an appointment with the insurer they represent.
ACT 158
Producer Licensing
Law becomes effective January 1, 2002.
- Section 1132 provides definitions for commission, sell, solicit and negotiate.
- Section 1136 provides that applicants "shall" apply for a license using the NAIC Uniform Application. Since this provision becomes effective 1/1/02, we'll continue using our DOI specific form until 3/1/02 and phase it out in the meantime.
- Section 1136A(7) has been added to provide that when applicable the applicant must have written consent from Commissioner pursuant to 18 USC 1033 as part of the license application. In the past, an applicant could apply for an insurance license first, and then apply for 1033 consent.
- Section 1136E provides that "Each insurer that sells, solicits, or negotiates any form of limited line credit insurance shall provide to each individual whose duties will include selling, soliciting or negotiating limited line credit insurance a program of instruction that may be approved by the Commissioner of Insurance.
- Section 1137 defines the major lines of authority. In addition there will be a distinction between personal lines and commercial lines for the property & casualty lines of authority. Our exams will be modified to reflect this change.
- Section 1137C Renewals shall be filed every two years vs. every odd-numbered and even-numbered year.
- 1137D Extends the reinstatement period from three (3) years to five (5) years from the date of expiration of the license.
- 1137E allows for DOI to grant waivers from complying with continuing education requirements due to military service or long-term medical disability.
- 1137G Change of address is still required, along with the $50 penalty fee for failure
to notify DOI.
(Number of postcards returned) - 1138 Non-Resident licensing- Graham Leach Bliley mandates that non-resident licenses be issued conditioned upon four (4) requirements:
- Person must be currently licensed in resident state and in good standing;
- Person has submitted the proper request for licensure and has paid the required fees;
- Person has submitted the application for licensure that they submitted to his or her home state or in lieu of that, a completed NAIC Uniform Application, and;
- The person's home state awards non-resident producer licenses to residents of Louisiana on the same basis.
- 1142 Section of License denials, non-renewals
- 1142A allows DOI to place someone's license on probation which is a new method of administrative action
- 1142A(19) has been added to provide for denial, revocation, suspension due to conviction of a felony involving dishonesty or breach of trust pursuant to 18 USC 1033.
- 1142I DOI retains the authority to investigate and impose penalties against persons who are under investigation or charged with a violation of Title 22 even if the person's license has been surrendered or lapsed.
- 1143 NEW SECTION totally on commissions
- NEW NEW NEW... 1144 covers company appointments. Section 1144A(1) states that a producer shall not act as an agent of the company unless they are appointed.
Section 1144A(2) states that a producer who is not acting as an agent of an authorized insurer is NOT required to become appointed. (OLD BROKER)
Section 1144(3) states that a producer who is authorized to act on behalf of another licensed producer in the sale, solicitation or negotiation of insurance shall NOT be required to become appointed by the producer. (SOLICITOR)
Section 1144B(1) states that an insurance company has to file an appointment form with DOI within 15 days from the date the contract is signed.
Also provides that an insurance company may appoint their producers to all or some of the companies within the company holding system by filing a single appointment.
One form but fees will be charged per agent per company. Reduces paperwork.
Section 1144B(2) states that DOI shall verify within a responsible time, not to exceed 30 days that the appointment is okay. If there is a problem with the producer's license and he cannot be appointed, DOI has to notify the insurance company within 15 days.
1144B(3) Renewal company appointments shall be done in a manner prescribed by DOI. We are looking into changing the dates IF NECESSARY to correspond with the renewal dates of the individual licensees.
1144C Allows for the selling of insurance for an insurance company PRIOR to being appointed but commissions cannot be paid until he/she is appointed.
1145 Notification of Termination - Insurance company must notify DOI within 30 days of the producer's termination. If the termination reason is for one of the reasons in 1142 the insurance company has to tell DOI within 15 days.
IMPORTANT TO COMPANIES: 1145D states that within 15 days of the companies notification to DOI concerning their termination, the company has to mail notification to the producer by certified mail, return receipt requested, postage prepaid or by overnight delivery using a nationally recognized carrier.
MOST IMPORTANT TO PRODUCERS: Section 1149A requires that a producer SHALL report to DOI any administrative action taken against them by another state within 30 days from the final disposition.
Section 1149B states that producers must notify DOI within 30 days of a conviction in district court of an offense covered under 1142(A)(7) and give us a copy of the bill of information or indictment.
Read Act 460
- Information about Louisiana no longer requiring reciprocal fees